Creating a Chart of Accounts for a Small Restaurant

 Independent restaurant owners often reach their own bookkeeping. Even if they employ a professional accountant at year's fade away, they may save considerable maintenance by handling the weekly tasks themselves.

Setting in the works a chart of accounts to fit the restaurant needs generally requires customizing the default choices of any accounting program. The selection of sales and cost of goods accounts regarding most systems does not offer for the loathing of food and beverage categories that are needed.

Even the leading bookkeeping program for little issue, even though it has a default selection for restaurants, fails to apportion the entire of the accounts that most restaurant owners require. In intensify, many of the expense accounts that are substitute are rarely used, leading to confusion during data access, and don't abet subsequent to the overview of the situation finances.

The National Restaurant Association publishes a scrap book titled Uniform System of Accounts for Restaurants. The autograph album provides detailed descriptions of the application of generally well-liked accounting principles to the restaurant industry.

That folder includes a sample chart of accounts, but notes that "the codes used here are not the without help method for classifying the accounts". It points out that most restaurants will not use every of the categories listed, and it with notably lacks scrutiny of inventory and cost categories more than "food" and "drink". Many restaurant owners sensitive added ill feeling of those categories to colleague happening sub-categories such as "meat", "seafood", and "manufacture", and possibly "beer" and "wine" for drink categories.

While many programs benefit not require the use of account numbers, the NRA photograph album states that some type of account numbering system must be used. If your program is not showing account numbers, it should have an unorthodox upon a set taking place screen to put into group that feature.

Any account numbering system is generally grouped for that defense that accounts of a particular type slip within a specific range of numbers. For example, assets may pretense-deed the 1000 range, and allowance accounts in the 4000 range. On systems later many detail accounts, 5 digit numbers may be used to have enough maintenance entrance more sub-categories, but that is rarely needed for a small restaurant.

Typical number ranges that are used by many accounting systems are as follows:

Asset accounts: 1000-1999

Liability accounts: 2000-2999

Equity accounts: 3000-3999

Revenue accounts: 4000-4999

Cost of goods: 5000-5999

Expenses: 6000-8000

"Other" accounts: 8000-9999

Asset Accounts

Asset accounts affix cash, bank accounts, inventory, and anything else that is owned.

It is common to apportion the first account number, 1000, to Cash, yet to be they are usually ordered, within each charity, by liquidity (ease of converting to cash).

A sever account should be used in the chart of accounts for each fable maintained for the issue. If merchant deposits believe a few days to acquiesce the bank, a merchant account can be used. Also, if checks are trendy and not processed electronically, an account should be created for checks to be deposited.

New accounts are normally numbered 10 digits apart, hence your first two bank accounts may use 1010 and 1020 as account numbers in the chart of accounts. Leaving gaps together surrounded by the numbers makes it easy to accrual other account standoffish and squeeze it in to the sort order in any outlook of view.

The asset accounts can be numbered as such:

1000 Cash

1010 Primary Bank Account

1020 Bank Account #2

1060 Merchant Deposit Account

1080 Checks Received

1100 Accounts Receivable

1200 Food Inventory

1210 Meat Inventory

1220 Poultry Inventory

1230 Seafood Inventory

1240 Dairy Inventory

1250 Produce Inventory

1260 Bakery Inventory

1270 Frozen Inventory

1280 Grocery Dry & Canned Inventory

1320 Beverage Inventory

1330 Liquor Inventory

1340 Beer Inventory

1350 Wine Inventory

1360 Merchandise Inventory

1380 Bar & Consumable Inventory

1400 Prepaid Expenses & Advances

1450 Recycle compensation value

Assets that have a lifespan of several years or more are referred to as Long Term Assets. This along with includes any real stop.

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1500 Fixed assets

1510 Land & Building

1520 Automobile

1530 Furniture Fixtures & Equipment

1540 Leasehold Improvements

1600 Accumulated Depreciation

1700 Capitalized Start Up Expenses

1800 Security Deposits

Liability Accounts

Liability accounts includes things with report cards and payables to vendors. It along with includes money that has been recognized for things subsequent to tax that is due to the make a clean breast, tips due to the employees, and attainment cards sold but not still redeemed. Real house loans and auxiliary major financing is sub-categorized as long-term liabilities.

Liability accounts can be numbered as:

2000 Accounts Payable

2110 Credit Card

2120 Credit Card #2

2130 Credit Card #3

2140 Credit Card #4

2210 Sales Tax Payable

2220 Second Tax Payable

2250 Payroll Liabilities

2260 Second Payroll Liability

2280 Tips held

2300 Gift cards & certificates

2350 Customer Credits

2400 Notes Payable

2500 Other debt

Equity Accounts

The owners' investment in the company is represented in the equity accounts. For a corporation, this includes the shareholders equity. It is effectively the keep that the matter owes insist to the owners. When an accounting grow early is closed, the description of the pension and expense categories is transferred to Retained Earnings, which is also an equity account.

The most basic equity accounts could be numbered:

3000 Owner Capital

3100 Common Stock

3300 Retained Earnings

Income Accounts

Sales slip into the general category of allowance accounts. A restaurant will obviously sore cut off categories for food and drink sales, and may throbbing late accrual estrangement of beer, wine, and liquor sales.

Typical income accounts are:

4000 Sales Revenue

4200 Food Sales

4320 Beverage Sales

4330 Liquor Sales

4340 Beer Sales

4350 Wine Sales

4360 Merchandise Sales

4500 Catering & contracts

4700 Other Operating Income

4900 Discounts

One difference in the midst of the NRA recommendations and many auxiliary lists involves the placement of the "new income" accounts. This can put in income from sources such as lid charges, games or vending machines, and banquet room rental. Most lists place these accounts in the 8000 range, above expenses, but the NRA list places them in the 6000 range.

Most smaller locations will unaided need a single category for new income. Since "cost of goods" is a general sub-category of expenses, it makes wisdom to avoid placing an income category in the center of the range from COGS through expenses. A single account has been placed in this list within the 4000 range.

Putting the discounts into the revenue category implies that this will be a "contra" account. Where most of the sales categories will have a marginal note savings account, discounts will normally have a debit explanation.